EUROPEAN WRAP: Stocks, Pound Decline; Gold Gains on U.S. Data

European stocks fell from a 23-month high as the U.S. economy unexpectedly shrank in the fourth quarter. The pound weakened to a 13-month low against the euro after EU economic confidence improved. Gold prices rose the most in two weeks. Italy’s borrowing costs slipped to 2-year Low at 10-year sale.

*S&P 500 down 0.1% to 1,507.10 *Stoxx 600 down 0.58% to 288.63 *US 10Yr yield up 2bps to 2.02% *German 10Yr yield up 3bps to 1.72% *MSCI Asia Pacific up 0.61% to 133.3

TOP EUROPE: *Euro-Area Economic Confidence Rises More Than Forecast *Euro Strengthens Above $1.35 as Economic Confidence Jumps *Deutsche Bank Seen Missing Goldman-Led Gains as Costs Rise *Saipem Plunges by Record in Milan After Cutting Profit Outlook *Gilts Fall as Mortgage Approvals Rise; Pound Weakens Vs Euro *Writedowns Near $50b as M&A Haunts Mine CEOs: Commodities *Draghi’s Bank of Italy Spotted Monte Paschi Missteps in 2010 *ECB Squeeze Drives Buyers to 15-Year Italian Debt: Euro Credit

SELECTED ECONOMIC DATA: *EU Jan. Economic Confidence 89.2 vs est. 88.2 vs revised 87.8 *EU Jan. Consumer Confidence -23.9 vs est. -23.9 vs prior -23.9 *UK Dec. Mortgage Approvals 55.8k vs est. 54.5k vs prior 54.0k *Spain 4Q Y/y adj. GDP -1.8% vs est. -1.7% vs prior -1.6%

EUROPE *19/19 sectors fell, led oil & gas, basic resources *Eurostoxx 50 -0.62%, FTSE 100 -0.25%, CAC 40 -0.54%, DAX -0.47%, IBEX -0.82%, FTSEMIB -3.36%, SMI -0.94% *Movers on earnings/statements: Saipem -34.29% , Antofagasta -8.31% , Ferrexpo -5.48% , Renishaw-5.1% , Fiat -4.83% , Imperial Tobacco Group -4.26% , Johnson Matthey -4.24% , Coloplast -3.86% , Scania -2.53% , BNP -2.2% , Credit Agricole SA -2.12% , Kenmare Resources PLC -1.87% , Societe Generale -1.68% , STMicroelectronics -1.68% , Roche -1.39% , E.ON -1.04%, Hennes & Mauritz AB +0.47% , Unibail-Rodamco +0.89% , SKF +1.16% , GFK +2.56% , Nordea Bank +3.17% , CAT Oil +4.25%, Zooplus AG +6.47% , QIAGEN +6.46% , NCC +7.52% , Swedbank +10.45%

*Other gainers: Imagination Technologies +12.77% , NCC +7.45% , Neste Oil OYJ +7.41% , QIAGEN NV +6.82% , JM AB +5.35% , Elan Corp PLC +4.97% , SEB +4.63% , Oriflame Cosmetics SA +3.73%

*Other decliners: Banca Monte dei Paschi di Sien -9.46% , Technip -7.08% , Petrofac -7.02% , SBM Offshore -5.8% , Alcatel-Lucent/France -5.44% , Bankia -5.01% , Eni -4.71%

EUROPEAN M&A: *UPS Responds to Formal EU Decision to Block TNT Deal *Subdued M&A Activity Expected in Mining in 2013, JPMorgan Says *Ipsen May Seek Acquisitions, Partnerships in U.S., CEO Says

FX/BONDS *Euro up 0.62% to $1.3575 *Dollar Index down 0.39% to 79.26 *Italian 10Yr yield up 13bps to 4.3% *Spanish 10Yr yield up 6bps to 5.22% *3m Euribor/OIS down 2bps to 10bps

COMMODITIES *S&P GSCI Index up 0.54% to 674.13 *Brent Futures up 0.25% to $114.65/bbl, WTI Futures up 0.05% to $97.62/bbl *Gold spot up 1.06% to $1681.45/oz *LME 3m Copper up 1.52% to $8226.5/MT *LME 3m Nickel up 2.46% to $18290/MT *Wheat futures up 0.8% to 783.25 USd/bu

ASIA *Nikkei 225 up 2.28% to 11113.95 *Hang Seng up 0.71% to 23822.06 *Kospi up 0.43% to 1964.43 *Shanghai Composite up 1% to 2382.48

WHAT TO WATCH TOMORROW *Germany Jan. inflation *ECB’s Constancio, Liikanen speak in Brussels *Sweden sells 10-year linker *Earnings from: Deutsche Bank, Ericsson, Shell, Diageo, AstraZeneca, BSkyB, Novo Nordisk, Banco Santander, LVMH

To contact the reporter on this story: Roger Neill in London at rneill3@bloomberg.net

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.